September 03, 2008

An Open Letter To Abacus, Experian, I-Behavior, NextAction, Prefer Network, Alexa, and Wiland

Dear Abacus, Experian, I-Behavior, NextAction, Prefer Network, Alexa, and Wiland Direct:

It is time for a change in the direction of your database strategy. The world is clamoring for catalogers to stop stuffing catalogs into the mailboxes of customers who want to decide for themselves who they purchase from, without interruption from marketers. The eco-based world is demanding that catalogers change, now.

Your clients tell me they want to know more about the names you provide for them. They tell me they don't understand your models, they don't truly understand what they are getting. They do tell me that they like the performance, on average, of the names you provide.

Here's what I would like to see happen.

When my clients pull another 274,399 names from your database, I'd like for my clients to see a profile of the names as follows:
  • Traditional catalog buyers who use the telephone to transact orders.
  • Catalog buyers who transact online.
  • Online buyers who combine online marketing, search, and catalog marketing to place online orders.
  • Online buyers who prefer social media, buyers no longer interested in direct marketing.
  • Multichannel buyers who skew toward retail stores.
  • True multichannel buyers who equally prefer phone, online, and stores.
When my clients get the 274,399 names from your database, I want the names split into these segments. I then wish to analyze performance across these segments. Which segments are most responsive? Which segments are BECOMING most responsive? Why are you sending my client unproductive names? Thank you for sending my clients productive names!

I want to overlay my twelve month customer file against these segments, observing changes over time. I want to overlay my lapsed buyers against these segments, observing changes over time. I want to dissect miserably performing segments to see if their behavior is evolving away from direct marketing preferences.

I want to overlay my e-mail customers across these segments, using the data to create targeted campaigns that speak to the interests of my e-mail marketing list.

I want to overlay my telephone customers across these segments. This is where remail marketing makes sense.

I want to overlay my online buyers across these segments. I want to overlay my paid search buyers across these segments. I want to analyze merchandise preferences across these segments, and analyze the segments various merchandise purchasers fall into. I want to analyze seasonal purchase activity across these segments. I want you to mine the internet for social media behavior for these customers, incorporating that information into the segmentation scheme.


I want you to provide my clients the consumer intelligence necessary to alter the future trajectory of my business. You have key insights about a hundred million households, yet my clients don't get to know hardly anything, even though they contribute the names that pay your bills. I want for you to build upon the segments listed above, and do much, much better than what I am suggesting. I know you're capable of doing so, you have gifted employees working for you.

I want you to lead my clients into the future. I want you to play an active role in the growing transformation of customer behavior toward non-direct-marketing-related purchases. I want for you to be trusted advisers. I want for you to help keep catalogs away from customers who don't want paper polluting their mailbox. I want for you to lead!

I'm able to do this at a zip code level. You are able to do this at a CUSTOMER level. Wouldn't Yahoo! or MSN benefit by integrating your future segmentation strategy into their search and portal advertising strategies, if you were able to sell them on the idea?

I also want for you to figure out a way to compensate the customers you mine information from to earn the profit that pays your salary and benefits. These customers deserve something from our industry, given that our industry profits from their information without their verbal or written consent.

Go make this happen.

8 comments:

  1. Well said! It's about time somebody challenged these data providers with a demand for actionable information.

    Unfortunately, the suppliers’ compensation structure does not align with the real needs of most clients.

    Smaller is better in today's marketing scene. Increased personalization to ever smaller segments.

    In addition, this type of information tends to omit non-producing names and reduces the volume. The perceived net effect from the suppliers eyes means smaller volumes and a short term reduction in data providers' compensation.

    Even if the volumes remain the same or even increase, the added services challenge the skills and resources available from these suppliers.

    In order to change the quality of the service to the degree you propose, these suppliers will need to come up with a more creative compensation structure.

    As always, compensation must align with the goal. And the goal is to create smaller segments with less waste and higher circulation of the best names.

    If the suppliers can't or won't do it, then the clients must lead the charge by forcing compensation based more on performance and less on volume.

    ReplyDelete
  2. Thanks for the feedback!

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  3. Anonymous6:12 AM

    Would you please elaborate on what you mean by 'overlay' your file on these segments? Are you comparing the segment performance of the dbase company provided list to that of the 'house' list? Thanks

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  4. The co-op sends me, for every record in my database, the segment my customers belong to --- with segment meaning the segments outlined in this article.

    If I send Experian/Z24 my entire twelve month file, they would send me my twelve month file back, attaching the segment the customer belongs to, based on Z24 scoring each customer in their database. I only get to see my customers, not all customers.

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  5. Anonymous2:20 PM

    Thank you for the response. cg

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  6. I like this idea - and believe the COOPs have the supporting cast to do this type of work.

    That being said, your segments are in large part determined by transactional data COMBINED with offer history, are MC marketers willing and able to supply complete offer history for their orders? Are they willing to truly partner with a COOP and support from a data standpoint?

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  7. I believe the co-op math/stat gurus have the ability to do this without offer history. Heck, I can do it at a zip code level. They can do far better at a customer level with the data they have.

    ReplyDelete
  8. I've also done similar stuff for clients, using customer data without offer history. It can be done!

    ReplyDelete

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